Internets Up in Advance of Fed Announcement

Internet stocks were on the rise in midday trading Tuesday in advance of the Federal Reserve’s decision on interest rates.

The Federal Reserve is set to announce whether it will hike interest rates shortly after 2 p.m. Eastern time. Economists are generally expecting a quarter-point increase, although most feel that is already factored into the market.

At around 11:30 p.m. Eastern,’s Internet Stock Index was up 8.66, or 1.76 percent, to 500.93, the Nasdaq Composite had climbed 29.67 to 2,749.24 and the Dow Jones industrial average had fallen 28.49 to 11,271.27.

The day’s big risers included E-Loan Inc. (EELN), climbing 4-1/2 to 27-7/8. The online mortgage company Tuesday purchased the auto loan business of from Bank of America for about $67.3 million in stock.

Microsoft Corp. (MSFT) was up 3-13/16 to 90-1/4. Shares were benefitting from a U.S. appeals court decision to reverse a preliminary injunction granted in November to Sun Microsystems Inc. that blocked Microsoft from shipping a modified version of Sun’s Java. Microsoft had contended its license allowed it to make modifications.

Separately, reports emerged Tuesday that Rick Belluzzo, who resigned as chairman and chief executive officer of Silicon Graphics, will join Microsoft to run its Internet operations. While SGI confirmed Belluzzo is leaving, it would not name the company he was joining and Microsoft would not comment.

America Online Inc. (AOL) was up 5/16 to 99-5/16. The company Tuesday launched version 3.0 of its Instant Messenger program. Germany’s Bertelsmann also announced it was selling its stake in AOL.

PSINet Inc. (PSIX) had climbed 1-1/8 to 47. The company late Monday announced it is purchasing Transaction Network Services for $720 million in cash and stock.

Verio Inc. (VRIO) moved up 2-9/16 to 39-11/16. AOL’s European subsidiary Tuesday also expanded a marketing agreement with Verio. Verio will now become the exclusive e-commerce, domain registration provider and Web hosting company for Netscape Online, AOL’s free Internet service for the U.K.

A number of Internet leaders were also higher, although none had significant news. Gainers included Inc. (AMZN) up 4-1/16 to 122-7/16, Ariba Inc. (ARBA) jumping 10-3/8 to 137 and SportsLine USA Inc. (SPLN) up 2-1/16 to 23-1/4.

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